Wal-Mart’s hard sell
Joseph Kizelnik is an imposing figure: 6ft tall, with a full silver beard, while his waistcoat, white shirt and black Hasidic coat add to his stately aspect.
Kizelnik likes to say that he is not sure exactly how many grandchildren he has - it was 33 at the last count - and he likes to chat amiably, often in Yiddish, with the customers at his Auction Mart discount store, which sells washing machines, toys, electronics and other goods in a nondescript shopping plaza in Monsey, 35 miles north of New York City.
In October, at a public meeting held at a local village council chamber, Kizelnik was not smiling. He was addressing a gathering of potential opponents of plans by Wal-Mart, the largest US retailer, to build a 215,000 sq ft “Supercenter” store on State Route 59, on the derelict lot where a drive-in cinema once stood. The site is next to the small store Kizelnik has operated for seven years.
“We should make petitions. We should make protests. That’s the way it is going to work,” he declared with inspired wrath before a 100-strong crowd. “We are the ones who elect the officials in this community. And we are the ones that break them.”
Wal-Mart, he warned, would be bad for the traffic on the area’s main road, where, just a few weeks before, a mother was killed as she walked back from visiting sick members of the community.
And it would be bad for crime: “This is a place where we leave our doors unlocked. If Wal-Mart comes in you are going to have to put bars on your windows. They will bring in very low-level people, and if these low-level people come in they are going to follow us to our homes, and ransack our homes.”
Kizelnik’s impassioned contribution was part of an unusually diverse line-up that chilly autumn evening: the village deputy mayor, two candidates for state and county office, a representative of the Pathmark supermarket that also sits adjacent to the proposed Wal-Mart site, and an environmental activist.
At the back, black-hatted men from Monsey’s Hasidic Jewish communities drifted in and out of the crowd, chatting discreetly to each other, sometimes with their wives, one or two with children tagging along. And at the very back stood the head of the local United Food and Commercial Workers union, accompanied by several thickset lieutenants in jackets and ties.
Such is the universe of the latest Wal-Mart “site fight” - one of many battles fought, mostly in vain - by people who want to stop the American retail behemoth from opening a store in their neighbourhood. These battles are part of a larger national war over the growth and influence of Wal-Mart. The struggle has become part of the American political landscape, even as the store itself has become part of everyday American life.
Every week more than half of the adult population of the US visits one of Wal-Mart’s stores, and with 1.8 million workers, the company is the largest private employer in the country. In November 2006 alone, it opened 21 stores, 19 of them giant Supercenters of the type it wants to open in Monsey. The total square footage added to its US store network in 2006 will be roughly equal to that of the entire global operations of Tesco, the UK-based supermarket chain.
Wal-Mart’s critics blame its low-price, low-wage model for problems ranging from the trade deficit with China to urban sprawl and the decline of the US middle class. Wal-Mart says it has lowered prices for the ordinary American more than it has lowered wages. But when a store opens, studies have shown that competitors go out of business and retail wages drop. (Wal-Mart says new complementary businesses then come in to take their place, such as chain restaurants.)
Nationally, Wal-Mart, which is strongly anti-union, is criticised by leading Democrats such as Barack Obama, John Edwards and John Kerry. The retailer is likely to draw more flak in the run-up to the 2008 presidential elections.
The search for growth is now pushing the retailer towards increasingly hostile territory - towards New York, Chicago, Boston, Los Angeles and other cities where its union foes have close ties to Democrat politicians.
Now the national debate has come to Monsey, New York, home to one of the largest Hasidic Jewish communities in the US. Monsey, and the adjacent village of Spring Valley, are a very long way from Wal-Mart’s roots in rural Arkansas. Here, the Wal-Mart site-fight is a case-study of the kind of local political issues and ethnic tensions stirred up as Wal-Mart and the unions join battle in urban America.
“This is one of the most unique projects I’ve worked on,” says Wal-Mart’s spokesman, Philip Serghini, who has to persuade people that a huge 215,000 sq ft Supercenter - with groceries, a petrol station and space for 900 cars - is just what Monsey needs.
Just how unique the area is becomes apparent with a drive into the residential streets of New Square village. It is less than two miles from the proposed site of the superstore. New Square was established in 1954 by the Skverer Hasidim, a group that came originally from the town of Skvyra in Ukraine. It was the first administrative village in the US to be run by a single religious group - and the Skverer demonstrated their loyalty by naming all of their streets after US presidents.
The houses on Reagan Road and on Bush and Clinton Lanes in New Square are large and close together; their small fenced front yards often filled with scattered plastic toys that attest to the average family here having at least five children.
New Square must be one of the few American suburbs where walking is normal, with most women (and a few men) pushing double buggies, and where the only non-Jewish people are Hispanic labourers working on new homes and new synagogues.
Throughout the other areas of Monsey, large multi-family dwellings destined for members of a number of different Hasidic groups are taking the place of what were once single homes; there are telegraph poles decked with eruv lines, which allow observant Jews to carry items otherwise banned on the Sabbath. There are also mikvah purification baths, private yeshiva schools, separated for boys and girls, and new shuls, or synagogues, being built.
The recently opened Rockland Kosher Supermarket is believed to be the largest of its kind in the US. Its aisles are wide and clean, the shoppers cheered by the cheery lilt of Yiddish marching tunes. Then there is the Kosher Castle diner, adjacent to the proposed Wal-Mart site, where I foolishly asked for milk with my coffee. In a kosher cafe serving meat no dairy products are allowed.
There are also signs of the community’s social conservatism. Magazines at supermarket checkouts are kept behind cards, so that ultra-orthodox shoppers aren’t confronted by the exposed flesh of Gisele Bundchen or Beyonce. The local press also has a unique perspective: last summer a Kosher merchant was discovered to have been selling non-Kosher chicken. This was undoubtedly a catastrophe for the ultra-orthodox. But the Rockland Bulletin, published monthly in English and Yiddish, ran a front page article announcing that “a dark cloud descended on the entire world. when news of the chicken fiasco broke.”
The local Hasidic community includes a number of other groups as well as the Skverer, such as the Viznitz, Satmar and Lubavitch. But politically, the Hasidim vote as a block, the way their rabbis advise them to vote. And that means they wield considerable power in local politics, a fact well understood by Richard Lipsky, the man who convened the anti-Wal-Mart meeting where Kizelnik spoke.
Lipsky is a lobbyist and a campaigner who works in New York City for the UFCW union, as well as for a range of other clients. He is a veteran of the New York political scene and has helped mobilise opposition to Wal-Mart, which has been trying for at least two years to open its first store inside New York’s city limits. Wal-Mart’s efforts have been stymied by a city government sympathetic to the unions, and to some degree by the efforts of Lipsky.
“Wal-Mart made one big mistake in New York,” he likes to joke. “They should’ve paid me to stay at home.” In July, even before Wal-Mart had started to focus its lobbying on Monsey, Lipsky had mapped out his strategy - to persuade the Hasidic leadership that the Wal-Mart would be very, very bad for them.
According to the letter of the law, a local appointed planning board will make the decision about whether or not the planned Wal-Mart meets existing state and local standards and regulations. But as Lipsky says, “in politics there are always two levels. There’s what’s on the surface, and what’s behind.”
In this case, he argued, “the key decision-maker” is the man who appoints the planning board: the town supervisor, Christopher St Lawrence. An elected official, St Lawrence is in turn politically dependent on the electoral support of the Hasidic community.
In December 2005, for instance, St Lawrence defeated a strong Republican challenge by 4,300 votes. Within the Hasidic village of New Square, St Lawrence took all 836 of the votes cast. In last November’s polls, Senator Hillary Clinton won by 1,502 votes against 24 for her Republican opponent in New Square, and Governor Eliot Spitzer won by an only slightly less convincing 1,299 to 241.
So to make his case against Wal-Mart, and to reach the mostly cloistered Hasidic leaders, who are not easily approached by lobbyists, Lipsky set out to mobilise the local Jewish retailers - whose financial support is so important for the yeshivas and synagogues of Monsey.
Mordechai Grunsweig runs Monsey Kosher Plaza, a kosher supermarket jam-packed with jostling ladies encumbered with children and shopping carts. “The local merchants are the people that help support the local organisations,” Grunsweig told me on a particularly busy day before the Jewish New Year holidays. “So if it hurts the merchants it will hurt the community.”
The politically connected Hasidim are, of course, not the only people living within the immediate vicinity of the proposed Wal-Mart store. The influx of Hasidic Jews that has transformed parts of Monsey has been mirrored by other immigration too, with an estimated 38 nationalities in the immediate area. The large Haitian population now rivals the Jewish community, both in numbers and political influence, while there is a substantial but unknown number of undocumented, mostly Hispanic, workers.
The new immigrants missed the area’s salad days in the 1950s and the 1960s, when new streets of bungalows were attracting middle-class families from New York City - many of them non-Hasidic Jews - and local manufacturing was generating jobs (the proposed store site still has its decaying 1950s drive-in cinema sign, recalling the old times).
Bruce Levine, a yarmulke-wearing county legislator - and a Wal-Mart foe - recalls that in those days the main street in the town centre at Spring Valley was the place to go shopping for a suit at Nat Kaplan’s, or to E.J. Korvette’s, the discount store chain that was one of the first to establish a model that was so successfully followed by Sam Walton, Wal-Mart’s founder.
“It was the retail centre of the county: if you wanted a suit for your bar mitzvah you went there, or to get a dress for your daughter’s confirmation - it was the traditional small-town downtown,” recalls Levine.
But in the 1970s, the old stores on Spring Valley’s narrow Main Street lost out to a new shopping mall that opened a few miles away. Local factories closed down, and crime and unemployment saw middle-class families moving away.
Today on Main Street there are empty stores and more store-front churches than shops - such as the Eglise du Nazarine, the Haitian Church of God and the Mount Zion Sanctuary Church. At the Kennedy Mall on Route 59, the cinema is showing Bollywood hits.
The small outlying Hasidic villages with their bustling stores might seem more prosperous than the more recently established immigrant communities that now predominate in Spring Valley, but they are not. Census data show that in New Square about two-thirds of the families have incomes that put them below the federal poverty line, against 15 per cent for the surrounding areas.
Tensions between the growing Hasidic community and other groups - including longer-established conservative and reform Jews - periodically erupt into local politics, in debates over funding public schools and zoning for new housing development, with the new Wal-Mart set to become another potentially divisive issue.
Three years ago the area was engulfed in controversy over anti-Semitic remarks allegedly made by Demeza Delhomme, a businessman and Haitian-American activist who was candidate for the county legislature. Delhomme, who insisted his words were deliberately mistranslated from a Creole broadcast on cable television, lost the election. But last year he attempted a political comeback, losing the tiny Democratic primary for mayor of Spring Valley by just five votes - votes he angrily maintains were fraudulent.
Then, in May 2006, one of Delhomme’s allies suggested in a local newspaper that a $6m urban renewal scheme for Spring Valley’s Main Street was in fact a conspiracy to benefit Jewish landlords at the expense of poor African-Americans and Hispanic families.
When I met Delhomme for lunch to discuss the Wal-Mart situation, he argued that the anti-Wal-Mart campaign was being used to distract attention from the redevelopment scheme. And while he says that he’s “neither against or for” the proposed store, he argues that overall it won’t be a bad thing, and would bring in new businesses, even if old ones went under.
He argued that the local Jewish leadership would have to take account of the impact of Wal-Mart on the community as a whole. “I don’t believe the people of the block vote are going to go against the community at large - I believe they have good things in mind, they want the community to survive.”
Knowing it was going to be in for a long and hard fight in Monsey, Wal-Mart remained largely quiet until November 2006, when it began its own operation to win hearts and minds. It sensibly put the rabbis at the top of its list.
The retailer, like its union opponents, has used middle-men to seek to influence events - a meeting between Wal-Mart’s Phil Serghini and a group of rabbis was set up by Menachem Lubinsky, president of Brooklyn-based consultants Lubicom. Lubinsky is a big shot in the observant Jewish community of New York City, whose firm founded Kosherfest, an annual kosher food industry show held at New York’s Jacob K. Javits Convention Center.
Soon afterwards, Wal-Mart organised its first meeting with residents. It avoided a potentially confrontational public meeting and instead offered an “information evening”, with Lubinsky’s firm providing the kosher buffet. The event was sparsely attended, attracting a few residents and a couple of businessmen interested in supplying the new store.
Serghini spent the evening by a desk covered with literature on Wal-Mart’s charitable giving and other policy issues, beside a pile of yellow Wal-Mart smiley-face squeeze-balls. He is an adept communicator, whose previous career included working for a Republican governor of Ohio and a spell with Philip Morris, the tobacco company. He is also part of a national team that has expanded dramatically over the past two years, as site-fights have taught Wal-Mart not to ignore local politics.
Serghini listed the issues raised during his meeting with the rabbis earlier that week: would Wal-Mart cover up its magazines? And what would it do about CD covers and video games? And would there be internet access at the store, regarded by some as a strong force for the corruption of youth?
“We want to listen and see what we can do to address these concerns,” said Serghini, citing in particular traffic, the impact on business and crime. “Security has been one of the main concerns. A tremendous lot of people have expressed their concerns about security. It’s often a concern, but not usually the first one.”
Two weeks later, I went to see Rabbi Jacob Horowitz, whose Community Outreach Center produces the Rockland Bulletin. He is one of the rabbis who had talked to Serghini.
Rabbi Horowitz is an important community leader, running an association of 42 Jewish private schools and helping the poor secure access to social services, food and medical assistance. He’s also a public conduit to the more reclusive rabbinical leadership - when Governor-elect Spitzer visited Monsey he met local leaders at Rabbi Horowitz’s house.
Speaking in his office lined with community awards, Rabbi Horowitz said that Wal-Mart had asked Jewish community leaders what they wanted, and had suggested the company could accommodate requests. Rabbi Horowitz made it clear that he would listen to Wal-Mart, but that “Wal-Mart should understand that we think the concept is no good.”
Serghini and his team will have their work cut out in the weeks and months ahead, as the planning board moves to review a study of the store’s environmental impact. This will include what is likely to be a lively public hearing.
Politicians, while technically removed from the planning process, will also have to decide whether they will risk antagonising leaders such as Rabbi Horowitz and the “block vote” in exchange for the increased sales and property taxes a Wal-Mart should bring them.
“For the economy of the town. this is a great thing,” said the rabbi. “But all these people who have to make the decision, they are elected officials. And they will have to make a major decision, if they expect to remain as public officials.”
Menachem Lubinsky, at Lubicom, still believes there’s a 60 to 70 per cent chance now that the store will get built, and that the local Hasidic leadership may end up divided on the issues. Richard Lipsky, on the union’s side, says that at this point “it’s still up in the air.” In early December, the UFCW staged what Lipsky says will be the first of a series of public demonstrations against the store - an event at which the largest group consisted of union members bussed in from New Jersey.
And if it does get built, will Monsey’s Hasidic businesses be able to survive?
Businessmen such as Kizelnik don’t like to talk about whether their businesses will prosper or not prosper - this being determined by bashert, one’s lot before God. “Whatever happens to my business is going to happen,” he told me in his store.
Sruli Weiss, manager of the Rockland Kosher Supermarket, just pointed to the sky, as he paused from checking shelves. “It’s up to Him. He’s the boss.”
Jonathan Birchall is the FT’s US retail correspondent.